Iran, Iraq and Egypt are seen to be potential new markets, according to officials at the World Gold Council, which said demand for gold in the Middle East had reached a record level for the third quarter of the year.

Dubai has until recently mainly re-exported gold, mostly to India, but the liberalisation of gold imports by New Delhi has caused re-exports to slide.

According to a WGC official quoted in local newspapers: "Iraq, Iran and Egypt will be the new gold markets and they are developing at a fast pace. Iran recently allowed the import of two tonnes of gold each month, with a cap of 20 tonnes a year. "We anticipate the Iranian market to be between 200 tonnes to 300 tonnes a year," the official said, adding the demand in Iraq and Egypt was expected to be 100 tonnesand 130 tonnes respectively. In Egypt demand grew 123 per cent in the third quarter compared to the same period last year, reaching 37.7 tonnes.

Pakistan's gold purchases meanwhile doubled to 32.3 tonnes in the third quarter. In the first three months the country's gold offtake totalled 93.9 tonnes, a rise of 27 per cent over the same period last year.

According to figures released by the World Gold Council this week, overall gold demand in the Middle East reached a record 116.4 tonnes in the third quarter of the year. Demand for the first three quarters of the year rose three per cent to 373.1 tonnes.

The figures showed that demand in the United Arab Emirates (UAE) fell by one per cent or half-a-tonne during the same period.

The WGC said a shortfall in demand in the UAE and Saudi Arabia during the third quarter was made up by healthy growth in Bahrain, Oman and Qatar.Total third-quarter demand in the UAE, Kuwait, Bahrain, Oman and Qatar was 32.6 tonnes. In Saudi Arabia, demand fell six per cent orthree tonnes to 46.1 tonne during the period. For the first nine months, gold demand in Gulf countries totalled 115.9 tonnes, exceeding the 114.2 tonnes recorded in the same period in the previous year. The total demand in the Middle East rose three per cent to 373.1 tonnes in the term.

"We saw a strong demand in the early part of the quarter, but that fell away sharply as the price increased and fluctuated towards the end of September," said DV Pathy, manager of Gulf states for the WGC. For the first nine months, the UAE recorded one-per cent growth in demand to 65.43 tonnes, while Saudi Arabian consumption declined two per cent to 160.3 tonnes and Kuwait followed with a decline of five per cent to 24 tonnes. In Oman demand soared eight per cent to 12.5 tonnes. Bahrain's demand was up six per cent to 8.5 tonnes and Qatar's increased 21 per cent to 5.6 tonnes. According to the WGC, the record demand in the Middle East was due to low gold prices in the first half of the period and an increase in touristarrivals as well as the success of a gold promotion drive.